From First Click to Lifelong Value: Why Banks Need to Embrace “Lifecycle Onboarding”
By Young Pham, SVP and Global Head of Financial Services AI at CI&T
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For many financial institutions, onboarding is a one-time event. A customer opens an account, and the bank delivers an information dump of available services, features, and options. Successful onboarding complete, and on to the next.
But fast-forward a few years and maybe that customer’s needs or circumstances have changed:
- They’ve built up a nice savings account and could use some wealth management advice.
- Their credit score has ramped up and they’re ready for a prime card.
- They’re getting ready to open their own business.
Suddenly, they could really use some of the other products or services the bank offers. But because onboarding started and essentially ended at the time the account was opened, they don’t remember everything that was thrust upon them way back then. So, they decide to seek out what they need with another institution.
Does this pattern sound familiar?
It’s a great way to keep account numbers up, but it won’t deliver much in the way of real value. Why? Because it may get a lot of customers in the door, but it’s a lousy way to build long-term relationships.
Key insight: That’s why onboarding isn’t just about opening a new account. It’s about establishing the kind of relationship that leads a customer to adopt more services down the road. It’s about following that customer along their lifelong financial journey and reaching out with solutions when they need them. It’s about keeping that customer engaged and sticky to your institution.
And that means treating onboarding not as a milestone that’s complete at account-opening, but rather as an ongoing process throughout a customer’s entire lifecycle with your brand. Here’s what this approach, which we call Lifecycle Onboarding, might look like.
The Shift: From Transactions to Lifecycle Onboarding
Think about the onboarding experience from the customer perspective. They log on or walk into a branch, provide some background information, and get an account number. So far, so good. But then they’re confronted with dozens of confusing services and options.
Autopay. Debit cards. Financial goal setting. Mobile banking. Overdraft protection.
These are all great features, of course, but not for every customer – and not necessarily right away. Customer journeys are non-linear and needs based. Which is why engagement tends to be more of a choose-your-own-adventure prospect than a pre-determined course of action.
For the bank, onboarding needs to be viewed as the beginning of a relationship. Over time, that means providing education and introducing services as they become relevant in the customer’s journey, instead of throwing everything at them all at once and hoping something takes.
For example, when your bank opens a managed credit card with a customer, maybe that new card is seen as the win. But if that customer builds a great credit profile over two years and then jumps to another bank for their prime card, is that still a win? If you had focused more on nurturing that relationship, they might have stuck with you when it came time for the prime card.
What happened? You helped build them into better customers in general, which is admirable. But because you didn’t stay in front of them as their needs and opportunities changed, another institution now stands to reap the rewards.
Key insight: Lifecycle onboarding can help keep those relationships intact. It’s a simple shift in thinking that realigns the focus from selling products to deepening usage over time.
The Enabler: AI, Data, and Distributed Experience
Following the customer journey and understanding the timing of their financial mileposts used to be much more difficult. But the technological advances that have made account-opening faster, easier, and more convenient for customers have done likewise for the institutions tracking and anticipating their needs:
- AI can enable predictive, behavior-based engagement. Does a customer need to know about savings accounts or goal-setting when they open a low-balance checking account? Probably not. But as their balances rise, AI can let you know when those types of options may be more realistic and, therefore, more attractive for them.
- Unified data layers can help support personalization. The more you know about a customer, the more you can tailor messaging to address their specific life stages and financial situations.
- Conversational systems can adapt to address customers at different intercept points. Once upon a time, the branch was the nexus of banking activity. For some customers, it may still be. But now you can better understand whether it’s easier and more effective to reach them through your website, mobile, or social media presence.
With these types of insights, onboarding can expand beyond the account-opening process to encompass multiple channels over time. The experience can be distributed across digital, branch, and third-party environments. The result? The customer can see your most attractive and applicable offerings – right when they need them the most.
And that’s a better recipe for engagement and long-term value than a laundry list of things they don’t understand or don’t care about at account-opening. Because it leads to the kind of service adoption that builds “stickiness” far more effectively than just product expansion.
The Hard Part: Organizational and Metric Transformation
But if lifecycle onboarding is such a winning formula for long-term customer engagement, why aren’t more institutions doing it? In many cases, it’s simply because old habits are hard to break:
- Account-opening and onboarding are considered the same thing, when in fact the former is just the very first stage of the latter.
- Customer ownership is often siloed by product line, and lifecycle onboarding requires cross-functional alignment.
- Long-held KPIs prioritize the wrong things, focusing primarily on new account numbers instead of taking retention, engagement, and service adoption into consideration.
The good news is that banks have the technology today to help turn the tide on some of these long-held assumptions. But technology alone won’t get the job done without a broader change to the institution’s operating model.
In other words, lifecycle onboarding is ultimately a mindset shift, enabled by AI but sustained by leadership.
Lifecycle Onboarding = Relationship Building
Acquiring new customers is like dating. If you really like someone, getting that first date probably isn’t the goal – building a longer-term relationship is. But you won’t get far past that first date if you don’t invest the time and effort to really get to know that person.
Bottom line: For a bank, throwing a bunch of options and education at a new customer at account-opening isn’t onboarding – it’s just overwhelming and off-putting. But following that customer on their financial journey and offering financial solutions when they need them is the kind of thing that can build a long-term relationship.
That’s the choice. Treat onboarding as a one-off, and your competitors will be dating your customers – while you’re still stuck at the first coffee meet-up.
